Buying houses by the handfuls

Published: Saturday, March 9, 2013 at 1:00 a.m.

Last Modified: Friday, March 8, 2013 at 8:14 p.m.

Investors buying foreclosures in bulk flocked back into Southwest Florida's housing market in 2012, paying on average 45 percent more for their homes than the properties were valued.

The new influx was propelled by local investors and Wall Street hedge funds -- each buying up single-family homes by the scores. But unlike the boom-time trend of flipping properties for a quick profit, most of these investors now are using the defaults to feed a thriving rental market, where they can muster better returns.

Most market observers expect the trend to continue well into 2013 and beyond, with more foreclosures likely to enter the market. They also predict the amount by which these investors are overpaying to increase further as competition grows stronger -- fueling online bidding wars over bank repossessions.

"The market is ripe for this," said Daren Blomquist, vice president of the real estate data provider RealtyTrac Inc. "With home prices still low and strong rental rates, investors are taking advantage of it."

Bulk-buying investors in Sarasota County accounted for 148 foreclosure sales last year. They paid an average of $127,146 for homes that were valued at only $93,479, according to data from RealtyTrac.

In Manatee County, many of the same active buyers purchased 132 foreclosures, similarly shelling out an average of $136,624 for properties with an estimated worth of $94,208, the research shows.

The most prolific foreclosure buyers in the region last year included individual investor Karl B. Helbig; the local investment group Sp1 Inc.; Portfolio Trust LLC; Northern Trust Co.; and THR Florida LLC, a subsidiary of the Blackstone Group.

Most of these investors are willing to outbid other traditional buyers for properties that fit their criteria -- even if it means paying tens of thousands of dollars more than the asking price.

The trend was consistent across Florida, where bulk-foreclosure buyers snapped up 5,289 properties that were seized by banks. More than half of those transactions stemmed from four counties -- Hillsborough, Miami-Dade, Broward and Palm Beach.

As foreclosure inventories in those cities tighten, most expect the investors to move more heavily into smaller markets, like Sarasota.

"They're not getting the best of the best in our area, and they're paying way over market for these properties," said Marcus Vanzant, broker and owner of Marcus & Co. Realty in Bradenton. "They're speculating the market has hit bottom and will come back up in five years."

<p>Investors buying foreclosures in bulk flocked back into Southwest Florida's housing market in 2012, paying on average 45 percent more for their homes than the properties were valued.</p><p>The new influx was propelled by local investors and Wall Street hedge funds -- each buying up single-family homes by the scores. But unlike the boom-time trend of flipping properties for a quick profit, most of these investors now are using the defaults to feed a thriving rental market, where they can muster better returns.</p><p>Most market observers expect the trend to continue well into 2013 and beyond, with more foreclosures likely to enter the market. They also predict the amount by which these investors are overpaying to increase further as competition grows stronger -- fueling online bidding wars over bank repossessions.</p><p>"The market is ripe for this," said Daren Blomquist, vice president of the real estate data provider RealtyTrac Inc. "With home prices still low and strong rental rates, investors are taking advantage of it."</p><p>Bulk-buying investors in Sarasota County accounted for 148 foreclosure sales last year. They paid an average of $127,146 for homes that were valued at only $93,479, according to data from RealtyTrac.</p><p>In Manatee County, many of the same active buyers purchased 132 foreclosures, similarly shelling out an average of $136,624 for properties with an estimated worth of $94,208, the research shows.</p><p>The most prolific foreclosure buyers in the region last year included individual investor Karl B. Helbig; the local investment group Sp1 Inc.; Portfolio Trust LLC; Northern Trust Co.; and THR Florida LLC, a subsidiary of the Blackstone Group.</p><p>Most of these investors are willing to outbid other traditional buyers for properties that fit their criteria -- even if it means paying tens of thousands of dollars more than the asking price.</p><p>The trend was consistent across Florida, where bulk-foreclosure buyers snapped up 5,289 properties that were seized by banks. More than half of those transactions stemmed from four counties -- Hillsborough, Miami-Dade, Broward and Palm Beach.</p><p>As foreclosure inventories in those cities tighten, most expect the investors to move more heavily into smaller markets, like Sarasota.</p><p>"They're not getting the best of the best in our area, and they're paying way over market for these properties," said Marcus Vanzant, broker and owner of Marcus & Co. Realty in Bradenton. "They're speculating the market has hit bottom and will come back up in five years."</p>